Correlation Between Helvetia Holding and Julius Baer

Can any of the company-specific risk be diversified away by investing in both Helvetia Holding and Julius Baer at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Helvetia Holding and Julius Baer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Helvetia Holding AG and Julius Baer Gruppe, you can compare the effects of market volatilities on Helvetia Holding and Julius Baer and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Helvetia Holding with a short position of Julius Baer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helvetia Holding and Julius Baer.

Diversification Opportunities for Helvetia Holding and Julius Baer

0.92

Correlation Coefficient

Helvetia Holding  Julius Baer

Almost no diversification

The 3 months correlation between Helvetia and Julius is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Helvetia Holding AG and Julius Baer Gruppe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Julius Baer Gruppe and Helvetia Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Helvetia Holding AG are associated (or correlated) with Julius Baer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Julius Baer Gruppe has no effect on the direction of Helvetia Holding i.e., Helvetia Holding and Julius Baer go up and down completely randomly.

Pair Corralation between Helvetia Holding and Julius Baer

Assuming the 90 days trading horizon Helvetia Holding is expected to generate 2.15 times less return on investment than Julius Baer. But when comparing it to its historical volatility, Helvetia Holding AG is 1.59 times less risky than Julius Baer. It trades about 0.15 of its potential returns per unit of risk. Julius Baer Gruppe is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  4,721  in Julius Baer Gruppe on September 5, 2024 and sell it today you would earn a total of  1,067  from holding Julius Baer Gruppe or generate 22.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Helvetia Holding AG  vs.  Julius Baer Gruppe

Helvetia Holding

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Helvetia Holding AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Helvetia Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Julius Baer Gruppe

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Julius Baer Gruppe are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Julius Baer showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helvetia Holding and Julius Baer

The main advantage of trading using opposite Helvetia Holding and Julius Baer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helvetia Holding position performs unexpectedly, Julius Baer can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Julius Baer will offset losses from the drop in Julius Baer's long position.

The idea behind Helvetia Holding AG and Julius Baer Gruppe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.